The mediating role of customer value on innovation and firm performance: Evidence from Indonesian SMEs

Abstract

Innovation and customer value are central issues in successfully business research. Firms need to determine how they are willing to meet their customers' needs through the product innovation. This study examines the role of customer value in the relationship between innovation and firm performance on Small and Medium-sized Enterprises (SMEs) Food in Malang City, Indonesia. Due to answer the purpose, questionnaire was developed and data was analyzed by Partial Least Square (PLS). The result indicated that customer value partially mediates the relationship between innovation and firm performance. Moreover, these findings provide evidence that SMEs can achieve competitive advantage through improved innovation encouraged customer value.